Industry Odisha Bureau, May 2: Compelled to maintain the profit margins after encountering the rising production costs, companies have now reportedly switched over to the business strategy of “Shrinkflation” triggered by the unabated Middle East crisis and utter disruptions of supply chain.
Without raising the sticker price so that the customers remain intact not alienated, “Shrinkflation is a practice of reducing a product’s size, weight or quantity while keeping its retail price the same that acts as a hidden form of inflation”.
For instances, “A bag of chips containing fewer chips, a chocolate bar with larger gaps between pieces, toilet paper rolls with fewer sheets, or a 1.5-liter bottle reduced to 1.25 liters, all at the same price”.
Owing to the severe disruptions caused by the Hormuz hurdle, costs of crude-oil-linked materials, especially packaging materials like high-density polythene, have reportedly “surged sharply about 42% in March” than it had been in February this year. Edible oil packaging is a glaring example besides other essentials.
Even multinational companies dealing in consumer retails are also reportedly bracing for the “Shinkflation” strategy.
Nevertheless, a temporary relief is reportedly being offered to the Indian consumers since some companies have reportedly built their respective buffer storages for stockpiling the requisite raw materials lasting at least half a year. Such a noteworthy business hyperopia (farsightedness) has reportedly enabled those firms to absorb the immediate shock and tide over the packaging material shortage faced in March amid the war-worn scenario since February 28 this year.
As per media reports, “Driven largely by food prices, India’s retail inflation rose from 2.75% in January 2026 to a 10-month high of 3.40% in March”.
